Organizations with 501(c)(3) status are officially recognized as charitable organizations. They have tax-exempt status and your contributions to them are tax-deductible. Before making a donation, make sure that you know about how your contribution will be spent, and that you can keep track of it. Here are a few things to keep in mind:

• Find out all you can about the organization: its purpose and the programs and activities it promotes. Check the website of your state’s Secretary of State to confirm whether the organization is registered and is allowed to contact you for donations. The Secretary of State's office usually registers businesses and nonprofit organizations. You can find links to the Secretary of State websites for your state here.
• If you are solicited over the phone, ask the caller to send informational materials about the organization and ask whether it has a website. Find out if the callers are being paid to solicit donations. If they are, ask them what percentage of your donation goes to them and how much goes to the organization's programs.
• Make sure to find out how much of your donation will go to programs and services of the charitable organization, and how much goes to administration and fundraising expenses.
• IRS Publication 78 lists all charitable organizations that can receive tax-deductible contributions. You can find your charity through the IRS website.
• Charitable organizations with 501(c)(3) status have to follow rules set by the government. If gross receipts exceed $25,000 they need to file yearly tax returns, making their financial information available to the public. All 501(c)(3) organizations that make more than $25,000 must file the IRS 990 or 990-EZ form. You can find the amount of public and government support, salaries, programs and fundraising, and spending on lobbying.
• Check the organization’s financial statements to confirm if you agree with their spending. Guidestar, Foundation Center and the Economic Research Institute provide free online search facilities for financial statements of nonprofits.

Read on for "Charitable Seals of Approval."

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